Carlos Urzua, Mexico's finance minister, resigns abruptly

MEXICO CITY – Mexico's finance minister abruptly resigned on Tuesday, accusing the left-leaning government of President Andrés Manuel López Obrador of making decisions that were not based on evidence, and appointing officials who had no idea about economics ,

The resignation of Carlos Urzúa was one of the biggest blows to the seven-month-old government. López Obrador has tried to court the business world by promising a balanced budget and a stable peso, despite launching ambitious social programs to help the youth and the poor.

But the peso slipped immediately after Urzúa announced his resignation on Twitter. more than 2 percent fall to around 1

9.3 pesos to the dollar. After López Obrador had appointed a US-trained technocrat, Arturo Herrera, as the successor to Urzúa, he later recovered somewhat.

The resignation could increase uncertainty among investors who are already afraid of the decisions of López Obrador they consider arbitrary, such as the cancellation of a $ 13 billion airport project outside of Mexico City. The president had claimed that the half-finished project was full of corruption.

Mexico became the No. 1 trading partner of the United States this year. But its economy – nominally the 15th largest in the world – is in a doldrums, and growth of less than 2 percent is expected this year.

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"I think this is the first call for something very serious," he told Luis Rubio, chairman of the Center for Development Research, a think tank in Mexico City. He said Urzua's furious resignation indicated that López Obrador was relentless in making economic decisions.

"This is a really angry letter from someone who has not been impulsive in the past," he said of Urzúa's mission.

Alfredo Coutiño, director of Latin America at Moody 's Analytics, said the resignation was a "shock" to Urzúa Englisch: emagazine.credit-suisse.com/app/art…1007 & lang = en The markets, as Urzúa was considered a "guarantee of fiscal caution".

Despite the peso regaining ground after naming Herrera, Coutiño said: "The root of the problem is the friction between the political and economic government." Even though Herrera will ensure the continuity of fiscal discipline The pressure that Mr Urzúa mentioned in his letter of resignation persists, "he said.

The President took office in December after winning a landslide victory López Obrador's approval rating of over 60 per cent still popular. But his government has often appeared disorganized and unemotional. Some ministries were characterized by tensions between centrists and more traditional leftists.

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Urzúa, a graduate in economics from the University of Wisconsin at Madison, said in his letter of resignation that he had "many disagreements over economic policy" with the government.

"Some of them were because this government made political decisions without sufficient foundation," he wrote. "I am convinced that economic policy must be based on evidence that takes into account the potential impact and has no right-wing or left-wing extremism."

Urzúa added that the administration has employed officials who have no knowledge of public finances. "He blamed such appointments for" influential people in this government with obvious conflicts of interest ". He did not identify any of the officers.

Like Urzúa, Herrera, the new minister, was employed in senior public finance functions in the administration of López Obrador when the leftist politician was mayor of Mexico City from 2000 to 2005. Mr. Herrera holds a Doctorate in Economics from New York University where he worked at the World Bank on public sector issues. Until Tuesday he was Under Secretary of State in the Ministry of Finance.

According to Coutiño, Herrera has earned respect in the markets for his work, including dealing with the debts of the Mexican oil giant Pemex. Investors, however, were not sure he would be up against López Obrador, added Coutiño.

"If he does not, this could be a permanent negative shock," he said.

Urzúa is the highest-ranking official to leave López Obrador's government. Other notable departures are those of Germán Martínez, head of the Social Security System, who left office in protest of austerity measures he described as "inhumane" and Tonatiuh Guillen, head of the Mexican Migration Institute. Guillen resigned last month after López Obrador had agreed to crush illegal immigration at the behest of President Trump.

Gabriela Martínez contributed to this report.

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